BWX Technologies' (BWXT) stock price increased due to a scarcity premium within the small modular reactor market and its status as a merchant supplier places it in a unique position to benefit from the sector's growth, BofA Securities said in a note on Thursday.
The firm said that the company benefits from being the exclusive supplier of nuclear reactors for the US Navy's submarines and aircraft carriers. The Navy is expected to continue purchasing these reactors despite shipyard delays due to the critical importance of maintaining a consistent supply.
BWX Technologies is positioned for medium-term growth in the international Canadian Deuterium Uranium nuclear power market through new reactor builds, refueling, and lifespan extensions, according to the note.
"In Special Materials, we look favorably on BWX Technologies' position as the sole commercial holder of a Category 1 Nuclear Regulatory Commission license, allowing BWX to handle critical special nuclear materials," BofA added.
The firm increased its price objective on the company's stock to $160 from $115 and reiterated its buy rating.
Price: 131.96, Change: -0.16, Percent Change: -0.12
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